How Banks Handled The 2024 Fed Rate Cuts — And What It Means For Your Savings Today

When the Federal Reserve cut interest rates multiple times in late 2024, savers saw the annual percentage yields (APYs) on their savings accounts get cut as well. But by how much those rates dropped depended largely on what kind of financial institution was holding their deposits. Data from 2024 show that savers got very different savings rate behaviors across large national banks, regional banks, online banks and credit unions.

Fed Chair Jerome Powell set the table for the U.S. central bank to cut rates again later this year during his speech last month in Jackson Hole, Wyoming. That means Americans could see their rates start to drop soon.

So, how did different types of financial institutions handle rate cuts in 2024? We’ll take you through a few of the largest to give you an idea of what to expect if rates fall this year.

National banks: large scale, gradual rate cuts

Some of the biggest U.S. banks, such as JPMorgan Chase and Wells Fargo, operate extensive branch networks and manage vast compliance and operational costs. These factors, combined with the banks’ diversified revenue from loans, investment banking, credit cards and their large wealth management business, mean they have flexibility to avoid sudden large cuts to savings rates.

That said, these banks generally boast the lowest savings account rates of all financial institutions; for both Chase and Wells Fargo, it’s a meager 0.01 percent APY. Wells Fargo offers customers holding more than $100,000 in its so-called Platinum Savings accounts an interest rate of 1.01 percent, which is higher than most other large banks. Balances between $500,000 and $999,999.99 earn 2.00 percent APY, and balances of $1,000,000 or more earn 2.50 percent APY. Those rates were unchanged from August 2024, before the Fed’s first rate cut, to today, despite the Fed cutting rates three times between September and December 2024.

This approach exemplifies big banks’ tendency to protect their broad funding base and adhere to regulatory capital standards, giving savers rate stability with fewer surprises — but with yields that are pretty minimal.

The national average APY has held steady at around 0.59 percent since August 2024, largely because most Americans still keep their cash locked up in these big banks’ savings accounts that pay about as close to nothing as possible.

Regional banks: tighter margins drive quicker rate cuts

In contrast, regional banks such as Regions Bank are a bit smaller and rely more heavily on deposits to fund their loans and other profit-generating activities. Their narrower revenue streams mean rate cuts from the Fed typically translate more swiftly into lower savings rates for customers.

In essence, they must be quick to react when costs change.

For example, Regions quickly slashed savings account yields after the 2024 Fed cuts and reduced the length of certificates of deposit (CDs) it offered to customers. The bank’s Chief Financial Officer David Turner said the bank was facing a “real challenge” dealing with its deposit ahead of the Fed’s looming rate cuts.

Regions and other regional banks moved quickly to cut APYs and even began discussing the cuts ahead of the Fed taking action last year.

It’s important to note that even though regional banks typically pay slightly higher rates than their larger national counterparts, the yields are still pretty paltry. Regions lowered its rate from around 0.25 percent APY to around 0.10 percent APY following the rate cuts, and today its rates on LifeGreen savings account pays 0.01 percent APY for most savers.

Online banks: high yields but rapid rate changes

Online banks such as Ally and CIT Bank operate with lean cost structures, no physical branches and technology-driven platforms. These factors allow them to offer some of the highest savings rates but also make them quick to adjust rates in response to Fed moves.

During the prior Fed rate hike cycle, online banks aggressively raised yields to capture deposits, with some topping out above 5 percent APY. However, following the 2024 Fed rate cuts, banks such as Ally reduced rates by almost a full percentage point, dropping from about 4.20 percent APY in August 2024 to approximately 3.50 percent APY today.

Western Alliance Bank, which offers an online-only savings account, did drop its rates a full percentage point in just six months, going from a 5.30 percent APY in August 2024 to 4.30 percent by February 2025.

Credit unions: member focus and moderate rate changes

Credit unions — including such names as Navy Federal Credit Union and Pentagon Federal Credit Union (PenFed) — operate as member-owned, nonprofit cooperatives. Because their business models are member oriented, they typically maintain higher yields and often lower rates more slowly than banks.

In 2024, most credit unions lowered rates after the Fed cuts but did so less aggressively than regional banks. PenFed, for example, offered a top APY of 3.00 percent on its Premier Online Savings Account in August 2024. As of August 2025, its Premium Online Savings account offers 2.80 percent APY.

What savers can learn from 2024

• National banks such as Wells Fargo provide steady but lower yields and take a cautious approach to rate cuts.
• Regional banks respond faster to Fed moves but usually boast higher yields than national banks.
• Online banks typically offer the highest rates but also cut APY rates quickly when the Fed lowers U.S. interest rates.
• Credit unions offer lower yields than online banks, but typically have moderate, stable yields that stay higher for longer after rate cuts.

Bottom line

With more Fed rate cuts expected in 2025, savvy savers should regularly compare yields and think about diversifying their savings across institution types. Locking in a fixed-rate with one of the best CD rates or buying short-dated U.S. government bonds (T-bills) before further cuts could also protect returns.

Online banks suit those chasing the top rates and willing to accept fluctuations. Credit unions appeal for steady yields and community values. National banks offer convenience and stability but lower potential returns.

Knowing how banks’ costs and strategies shape rate moves helps you keep your savings rate ahead of inflation during these uncertain times.